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Archived - Evaluation of the Export Programs - Final Report

July 2014

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Executive Summary

Background

The Canada Border Services Agency’s (CBSA) mandate is to facilitate trade and travel across Canada’s border while protecting Canada’s population from border related risks. The CBSA manages the movement of Canada’s exports as legislated by federal lawsFootnote 1 and regulations.Footnote 2 The Export Programs support both the Admissibility Determination Program and the Criminal Investigations ProgramFootnote 3 in the CBSA’s Program Alignment Architecture (2013-2014), by ensuring that exported goods are compliant with Canada’s export control legislation.Footnote 4 This also involves supporting the Government of Canada’s commitments to international accords,Footnote 5 which include those related to counter proliferationFootnote 6 and non-proliferation of nuclear and other weapons.Footnote 7 In 2013, the total value of goods exported from Canada was $472.5 billionFootnote 8 and contributed to 30% of Canada’s GDP.Footnote 9 Canada is the 13th largest exporter in the world.Footnote 10

Evaluation Purpose

The purpose of the evaluation was to assess the relevance, performance and efficiency of CBSA’s Export programs, in accordance with the Treasury Board Secretariat Directive on the Evaluation Function.Footnote 11 The data collected from various methodologies, using both quantitative and qualitative methods, was triangulated to develop the findings. The recommendations presented are based on these findings. The CBSA’s Program Evaluation Division (PED) carried out the evaluation research between September 2013 and February 2014. The research methodology is detailed in Appendix F.

Summary of Findings

Relevance

Is there a need for the Export Programs?

Canada is a leader in the production of nuclear, chemical and biological technologies and goods which are considered dual-use goods. This means they can be used for both peaceful as well as military purposes. Canada’s expertise in these areas makes it a potential target for proliferators. Footnote 12

Most of Canada’s export controls are required because Canada is a partner in multilateral or international agreements, such as the Wassenaar ArrangementFootnote 13 and the Zangger Committee,Footnote 14 whose purpose is to counter the proliferation of such goods.Footnote 15

The Export Programs are therefore needed to control the exportation of strategicFootnote 16 and other controlled goods.Footnote 17

Are the Export Programs aligned with the CBSA’s mandate, and the priorities of both the CBSA and the Government of Canada?

The Customs Act and Canada Border Services Agency Act provide the CBSA with the authority to enforce Canada’s export legislation. The three national priorities of the Export Programs are consistent with the CBSA’s mandate. Footnote 18 Also, the CBSA works with other government departments to support the Government of Canada’s commitment towards creating a safe and secure international trade chain and thus supports Government of Canada priorities.

Performance

To what extent do the Export Programs ensure Canada’s exports are compliant?

The Export Programs were originally established to collect export statistics on behalf of the Government of Canada (Statistics Canada) to inform the trade community. As a result, it collects limited information on exporter compliance and the risks associated with non-compliance which limits the ability to assess program performance and effectiveness.

Based on available data in the marine mode of transportation, the program is successful at ensuring that Canada’s exports are compliant to the extent that the examination resultant rateFootnote 19 for this mode of transportation [*]

Based on other available data the resultant rate is high for referrals related to the CBSA’s counter proliferation risk-assessment activities in the marine and air modes of transportation. Therefore, the Program is also successful at ensuring that counter proliferation activities are helping Canada meet its export obligations.

The Winnipeg Rail Unit conducts targeting and compliance verification activities for exports in the rail mode of transportation and therefore also supports the CBSA’s efforts to ensure Canada’s exports are compliant.

The four existing export reporting options available to exporters (two paper-based and two electronic), all of which were designed to meet trade data reporting requirements, have limitations within which the Export Programs must operate. While the paper-based B13A export reporting option is still in use, it has been declining steadily since FY 2007- 2008. However, export declarations made using the second type of paper-based reporting, i.e. Summary Reporting (designed for bulk goods), increased from approximately 4% of all export declarations in FY 2007-2008 to approximately 7% in FY 2012-2013. Footnote 20 In the air mode of transportation B13A declarations comprise 27% of all export declarations which is not efficient as export risk assessment is labour intensive in that each declaration is manually reviewed.

The two automated export declarations (Customs Automated Export Declaration and G7), which comprised approximately 87% of all declarations in FY 2012-2013, provide the means to view export shipments electronically. [*]

To address these concerns, the Agency continues to pursue the development of a new export system that would provide automated risk assessment capability, as well as enhanced data acquisition, and improved performance measurement functionality.Footnote 21

To what extent are clients aware of export requirements?

Information on Canada’s export requirements is not always accessible and clear to exporters due in part to the posting of information on each department’s Internet sites on whose behalf the CBSA enforces legislation.Footnote 22 However, the CBSA consults regularly with external stakeholder associationsFootnote 23 representing exporters and carriers and informs them of legislative and regulatory changes.

To what extent do partnerships contribute to the achievement of CBSA’s export obligations?

Key partnerships with other government departments and external stakeholders in relation to exports support the CBSA’s export obligationsFootnote 24 but some gaps exist. Processes are being implemented by CBSA and Department of Foreign Affairs and Trade Development (DFATD) to prevent delays when determination decisions are required on goods suspected of being counter proliferation in nature are detained by the CBSA.

Demonstration of Efficiency and Economy

Are the activities of the Export Programs delivered in a cost effective manner?

In the absence of information on the full number of FTEs or resources spent on the Export Programs, the evaluation was not able to establish the cost of the Export Programs or assess the efficiency of program activities.

Recommendations, Management Response and Action Plan

Overall Management Response

The Export Program supports the Canada Border Services Agency’s (CBSA) mandate to provide integrated border services that support national security through various legal authorities. The Customs Act requires that all goods, unless exempted, be reported by exporters to the CBSA and provides limited authority to examine, detain and seize goods. Those authorities mandate exporters to report their goods, but do not impose a positive obligation on the CBSA to actively perform export activities. The Export and Import Permits Act (EIPA) does however impose positive action on CBSA officers to satisfy themselves that items listed under the Export Control List comply with regulatory requirements prior to their exportation.

Initially, CBSA’s activities for export were limited to the collection of trade statistics on behalf of Statistics Canada. The CBSA’s involvement in the control of exports began in 1985 with efforts to counter the proliferation of military and strategic goods. Over time other export controls were added to CBSA’s mandate reflecting the Government of Canada’s accession to various international agreements controlling a range of goods (e.g. conflict diamonds, endangered species, trade sanctions, and hazardous waste). The Agency was well positioned at the border as the enforcement arm for export control policies led by various Government of Canada departments (e.g. Department of Foreign Affairs, Trade and Development, Environment Canada, Natural Resources Canada, and Heritage Canada). Most recently, the CBSA committed to Parliament in 2010 to identify and integrate the interdiction of stolen vehicles as an additional export control into existing export resources.

The funding CBSA received for the conduct of counter proliferation activities represents the core resource base for export activities today. The growing list of responsibilities has generally not been accompanied by an increase in resources. This incremental work has been managed within CBSA’s resource base.

Although the authorities for the CBSA’s control of imports and exports at the border are both mainly established in the Customs Act, there is a significant difference in the authorities and scope of these two activities. For example, while all imported goods are required to be reported to the CBSA, there are broad exemptions for exports. Similarly, in all circumstances the CBSA must make a positive determination prior to the release of goods entering Canada; however the same control over goods only applies to a limited and specific set of controlled items leaving Canada.

This contrast is the result of differing policy drivers for the goods being controlled. Indeed, import controls aim at protecting the safety and security of Canadians in Canada while export controls aim at fulfilling Canada’s international interests and commitments, including preventing states and non-state actors from acquiring or developing weapons of mass destruction that could be used to threaten or attack Canada, Canadians, and Canadian interest. The CBSA’s export activities and the results achieved over the past decades, particularly in regards to counter-proliferation and stolen vehicles, have been positive. The CBSA has prevented goods from being exported to countries under international and domestic sanctions and disrupted global procurement networks that seek to source strategic goods from Canada. Also, the Agency has recovered more than a thousand stolen vehicles at marine ports since 2010.

With a growing mandate, level of activity and commitment for export monitoring and control, the CBSA in January 2014 launched the Export Programs Improvement (EPI) Initiative to assess program integrity and enhance internal controls, beginning with the marine mode, which represents a significant volume of Canadian exports.

As a result of the EPI Initiative, the CBSA has implemented a national marine examination range, completed compliance stints at select marine ports, developed a resource allocation model, and tested an export random examination range for the marine mode.

Moving forward, the CBSA will establish an Export Program Framework, examining and confirming the program’s mandate for senior management’s consideration, governance, key activities, desired program results, and ongoing funding requirements. CBSA will also conduct a legislative and regulatory review to identify any gaps in CBSA authorities to deliver on the Agency’s export mandate, and assess options for replacing the aging Canadian Automated Export Declaration (CAED) system.

The CBSA’s export obligations have evolved over time beyond the limited focus of trade data collection. However, its increased activities both internally and on behalf of other government departments have resulted in a mismatch between its obligations and the required resources. Current resources, tools, systems, and processes available are not sufficient to ensure program success and integrity. The enhanced activities are also not reflected in the Agency’s Program Alignment Architecture.

The importance of the Export Programs needs to be determined and ascertained in the Agency’s plans and priorities, and its mandate needs to be clarified accordingly.

In light of these findings, it is recommended that:

Recommendation 1:

The Vice-President of Programs Branch will, in cooperation with the Vice-President of Operations Branch, clarify the mandate for the Export Programs and align resources accordingly.

Management Response

The two Branches will jointly conduct a review of the current export programs and develop a renewed framework proposal outlining the program mandate, governance, key activities, desired program results, and funding requirements. The proposal will be brought forward to Executive Committee for approval.

Management Action Plan

Completion date

The Programs Branch will work with Operations Branch to elaborate a renewed Export Programs framework that will define the mandate, outline key activities and outcomes, assess program priorities, and establish roles and responsibilities across all modes.

October 2014

The Programs Branch will work with Operations Branch to determine the optimal delivery structure and resource requirements to effectively deliver against the renewed Export Programs framework and implement the structure.

March 2015

1. Introduction

The Canada Border Services Agency’s (CBSA) mandate is to facilitate the movement of legitimate travellers and goods and to intercept those travellers and goods that pose a threat to Canada. The CBSA, under the authority of the Customs Act, is responsible for monitoring exports from Canada in accordance with the requirements of other government departments as well as international agreements and commitments related to strategic and dangerous goods.Footnote 25

In 2013, exports made up 30% of Canada’s gross domestic product (GDP).Footnote 26 In 2013, the total value of goods exported from Canada was $ 472.5 billionFootnote 27 making Canada the 13th largest exporter in the world.Footnote 28 Exports are vital to Canada’s economy and prosperity as one in five Canadian jobs are dependent on them.Footnote 29 While the highway mode of transportation represented 32.4%Footnote 30 of the total value of exports in calendar year 2013, export declarations are required mainly for exports to non-U.S. destinationsFootnote 31 and must be reported to the CBSA. The CBSA reviews and risk assesses these declarations. The Agency also verifies that goods that require a permit by another government department are not exported without one (see Appendix C for full process). If goods do not comply with requirements, they are detained, and/or seized, and a monetary penalty may be issued or, the case will be assessed, based on compliance history, indicators and intent, and might be referred to criminal investigation for further assessment and any action they deem appropriate. Export declarations are also used by Statistics CanadaFootnote 32 to collect trade data.Footnote 33

The budget for FY 2012-13 was approximately $ 1.3 Million for the Export Programs Unit in the Programs Branch at National Headquarters (NHQ), and approximately $ 1.1 Million for the Operations Branch which includes the Counter Proliferation Unit. The full cost of regional export related activities was not available.Footnote 34

Context

Risk assessments of export declarations are conducted both at National Headquarters (NHQ)Footnote 35 and in the regions, though resource capacity dedicated to exports differs per region [*]. The information used to support these efforts is contained in the CAED, G7 and B13A exporter declarations. Another reporting option is available for bulk exporters: Summary Reporting. This program allows exporters to report directly to Statistics Canada post-departure on a monthly basis. The Summary Reporting program is the only facilitative benefit offered at this time. The original intent of these reporting options was directly associated with the need to compile export statistics on behalf of the Government of Canada. Though the CBSA’s export mandate evolved over time beyond the limited focus on data collection, corresponding changes to the reporting requirements that would allow for in-depth risk assessment capabilities did not keep pace.Footnote 36 Also, unlike the U.S. and the U.K., Canada does not have an overarching unified counter proliferation strategyFootnote 37 which sets forth a framework that outlines the roles and responsibilities of different government departments and agencies, accountability and control over resources. So far, Canada has been unsuccessful in implementing a similar counter proliferation strategy.Footnote 38

While the technology exists to automatically assess high risk imports entering Canada, export risk assessment relies on a labor intensive manual screening of declarations. Similar limitations restrict the Agency’s ability to provide timely and relevant performance data that is required to assess exporter compliance. To address these concerns, the Agency continues to pursue the development of a new Export System that would provide enhanced data acquisition, automated risk assessment capability and improved performance measurement functionality. The new system is expected to enable the Agency to adapt to emerging priorities from international partners and other OGDs in relation to counter proliferation and other non-strategic goods, and bring the Export Programs in line with international standards.Footnote 39

Evaluation Purpose and Scope

The evaluation of the CBSA’s Export Programs was identified as a priority for 2013-2014 in the CBSA Five-year Evaluation Plan, approved by the Executive Evaluation Committee in July 2013. The purpose of the evaluation was to assess the relevance and performance of the CBSA Export Programs in accordance with the Treasury Board Secretariat Policy on Evaluation. The CBSA’s Program Evaluation Division carried out the evaluation research between September 2013 and February 2014. Details of the research methodologies are provided in Appendix F.

Excluded from the evaluation scope were exports in the courier mode of transportation.

An evaluation plan and framework was developed based on the expected outcomes identified in the program logic model (Appendix D). The Export Programs logic model was developed in consultation with program management. Exhibit 1 lists the evaluation questions that were used to assess program relevance, performance and efficiency.

Exhibit 1: Evaluation Questions

Evaluation Issue: Relevance (Is there a continued and on-going need for the program?)

Is there a need for the Export Programs?

Are the Export Programs aligned with the CBSA’s mandate, and the priorities of both the CBSA and the Government of Canada?

To what extent do the Export Programs ensure Canada’s exports are compliant?

To what extent are clients aware of export requirements?

To what extent do partnerships contribute to the achievement of CBSA’s export obligations?

Evaluation Issue: Efficiency and Economy (Demonstration of Efficiency and Economy)

Are the activities of the Export Programs delivered in a cost effective manner?

Evaluation Research Limitations

Prior to making decisions on suitable research methodologies, the evaluation team conducted a preliminary document and data review to gain a better understanding of the Export Programs, and identified information sources and data limitations. As such, a pre-evaluation data check of operational and performance data was conducted to assess the availability of data currently being collected by the program areas. This review contributed to determining the availability, reliability and usefulness of available data and the extent to which performance indicators were in place and data was collected by program staff. The review also determined secondary data sources such as data available from Statistics Canada, external association reports, and the 2008 Export Programs evaluation. This helped to identify data limitations that needed to be addressed and mitigated either through the use of different methodologies, proxy measures or through the collection of primary data.

Limitation

Impact/Mitigation Strategy

The Performance Measurement Framework for the Export Programs was developed and finalized in June 2013. Twenty seven indicators were identified but data is presently collected for only two, both in the marine mode of transportation. These consist of: the number of examinations and number of resultant examinations.Footnote 40 These are not divided by source of examination (e.g. the result of referrals sent from the Counter Proliferation Operations Section or the International Trade in Arms Regulations unit in Winnipeg, or selective examinations following regional risk assessments).

With no national data available on the results of compliance verification activities in the different modes of transportation, the evaluation was unable to review and assess compliance in the air and highway modes of transportation. The evaluation used data available from the air cargo compliance activities which took place in 2008 as a baseline measure for the degree of non-compliance in the air mode. No other new quality assurance activities were conducted since that time.

The CAED system does not meet CBSA’s current needs regarding the collection of export declaration data. CAED was built strictly to collect trade statistics. Currently owned, operated and maintained by Statistics Canada, the system does not have performance measurement,Footnote 41 targeting, risk assessment and monitoring capabilities.Footnote 42 Instead, Statistics Canada collects data on the number of linesFootnote 43 (but not the number of declarations) and the dollar value of exports by port, mode of transportation, region and time.

The number of lines in an export declaration available from Statistics Canada was used as a proxy measure to compare the use of the four export reporting options (i.e. declaration methods).
In February 2014, after the evaluation field work stage ended, the Export Programs Improvement initiative (EPI) was established and began collecting export program performance information including the number of declarations in each mode of transportation for FY 2012-2013. As requested by the President, a national marine export examination rate was also established in March 2014 for immediate implementation.

There are no performance targets for any of the three national export priorities:Footnote 44

1. Counter proliferation

2. Other Government Departments

3. Stolen Vehicles

Due to the absence of performance targets, it was not possible to determine if the level of compliance for each priority area was meeting established targets.

Border Services Officers (BSOs) do not record their time against a specific export activity code.

Apart from the ten FTEs identified by the Export Programs Unit working at marine ports in three regions, it was not possible to ascertain the exact number of FTEs or resources spent on exports. Therefore the exact cost of the Export Programs in the regions could not be established. Costs include only NHQ FTEs and Operations and Maintenance (O&M).

2. Key Findings – Relevance

Is there a need for the Export Programs?

Canada’s expertise in the areas of nuclear, chemical and biological technologies and goods has made Canada a potential target for proliferators.Footnote 45 The Export Programs are needed to control the exportation of strategicFootnote 46 and other controlled goods.Footnote 47

The Export Programs are necessary to control the exportation of strategic controlled and dual-use goods.Footnote 48 The CBSA identified the proliferation of dual-use goods as one of six areas of principle concern for the Agency in the next five to ten years.Footnote 49 Trade diversification to new and emerging markets has brought new international threats and risks. Strategic exports are categorized as a medium risk in the CBSA Enterprise Risk Profile (ERP).Footnote 50

Failure to control or prevent the export of strategic goods could result in trade sanctions by one or several countries. Given that a significant proportion of Canada’s GDP is a result of international trade, this could damage Canada’s economy and reputation as a safe trading partner. In the late 1990s, Canada lost its exemption under the U.S. International Trade in Arms Regulations (ITAR)Footnote 51 which resulted in the loss of billions of dollars in trade.Footnote 52 Canada’s exemption was only reinstituted through the strengthening of its export control.Footnote 53

Most of Canada’s export controls exist because Canada is a partner in multilateral or international agreements such as the Wassenaar Arrangement,Footnote 54 Zangger Committee,Footnote 55 International Traffic in Arms Regulations, UN Resolution on Proliferation Financing,Footnote 56 and Revised Kyoto Convention.Footnote 57

As a member of the World Customs Organization (WCO), the CBSA also has a commitment to ensure that Canada’s exports are consistent with international standards and procedures.Footnote 58 Customs organizations and governments need to work with other cross-border governmental agencies to remove and remedy dangerous, unlawful and otherwise unfit merchandise from the trading system.Footnote 59

Are the Export Programs aligned with the CBSA’s mandate, and the priorities of both the CBSA and the Government of Canada?

The three national priorities of the Export Programs are consistent with the CBSA’s mandate. Also, the CBSA works with other government departments to support the Government of Canada’s commitment towards creating a safe and secure international trade chain and thus supports Government of Canada priorities.

The Customs ActFootnote 60and Canada Border Services Agency ActFootnote 61 give the CBSA the authority to enforce Canada’s export legislation. When goods are found to be non-compliant, the CBSA can detain, seize, forfeit, issue monetary penalties or prosecute exporters or service providers.

In October 2012, the Export ProgramsFootnote 62 identified three national priorities which include counter proliferation,Footnote 63 enforcing the export legislation of other government departmentsFootnote 64 and controlling the export of property obtained by crime (stolen vehicles).Footnote 65 The national priorities are aligned with the CBSA mandate under the Canada Border Services Agency Act.Footnote 66

The CBSA’s Export Programs are also aligned with the Government of Canada’s priorities on foreign, defense, national security, health and safety and promote national prosperity. Export control is a government wide responsibility and not restricted to the CBSA. Export permits, certificates and licenses are issued by other government departments (OGDs) such as the Department of Foreign Affairs and Trade Development (DFATD),Footnote 67 Environment Canada,Footnote 68 Health Canada,Footnote 69 Heritage CanadaFootnote 70 and the CBSA verifies these upon the exiting of the goods. The CBSA also collects trade data on behalf of Statistics Canada which fulfils Canada’s trade commitments as outlined by the World Trade Organization (WTO).Footnote 71 In fact, the CBSA’s export obligations have evolved over time beyond the limited focus of trade data collection. As a result, its increased activities both internally and on behalf of other government departments have had an impact on its role and responsibilities. The enhanced activities are also not reflected in the Agency’s Program Alignment Architecture.

Recommendation 1: The Vice-President of Programs Branch will, in cooperation with the Vice-President of Operations Branch, clarify the mandate for the Export Programs and align resources accordingly.

3. Key Findings – Performance

To what extent do the Export Programs ensure Canada’s exports are compliant?

The Export Programs collect compliance information at a national level only for the marine mode of transportation. The program is successful at ensuring that Canada’s exports are compliant to the extent that the examination resultant rate for this mode of transportation [*].

Exhibit 2 outlines the compliance rates in the top five marine ports. The resultant rate for the marine mode of transportation [*] in 2012-2013. There is no target resultant rate. Therefore, it is not possible to indicate whether the Export Programs are meeting an established objective. However, the program surpassed its target examination rate of [*] just recently set by the Export Programs Unit in February 2014Footnote 72 with its [*] examination rate.

The ports of Montreal and Halifax have the highest resultant examination rate largely due to stolen vehicles. A majority (68%) of all export examinations were pier examsFootnote 73, 26% were conducted with VACISFootnote 74/HCV-MFootnote 75 machines, and 6% of examinations were conducted in a container examination facilityFootnote 76 (CEF). The vast majority of CEF exams took place in Montreal and Halifax.

Exhibit 2: Compliance Rates for the Top Five Marine Ports, FY 2012-2013

In FY 2012-2013 the marine mode of transportation accounted for 41% of export declarations,Footnote 78 second only to the number in the air mode of transportation (Exhibit 3).

Exhibit 3: Number of Export Declarations by Mode of Transportation,
FY 2012-2013

Mode of Transportation

# of Declarations FY 2012-2013

% Share by Mode of Transportation

Marine

453,458

41.1%

Air

587,430

53.9%

Highway

49,148

4.5%

Rail

14,657

1.3%

Total

1,104,693

100

Source: Data Warehouse, CBSA Programs Branch Data.

Compliance data is not collected for the air and highway modes of transportation.

The air mode of transportation has the highest number of declarations, at 54% in 2012-2013. The last compliance verification activities that took place in this mode of transportation were in 2008-2009Footnote 79 and focused mainly on paper-based export declarations (B13As). Approximately 45% of B13As examined were found to be non-compliant, indicating that reported information was inaccurate, incomplete or untrue.

While the highway mode of transportation represented only 4.5% of total export declarations in 2012-2013, it represented 32.4%Footnote 80 of the total value of exports in the 2013 calendar year. Therefore, one-third of the value of all exports was destined for the U.S. for which an export declaration was not required.Footnote 81 If an exporter does not submit the required permits, the CBSA has no way of knowing if exports requiring a permit actually have one. While the onus is on U.S. Customs and Border Protection to verify imports, and while U.S. import statistics are shared directly with Statistics Canada and constitute Canada’s export statistics, no permit-related or compliance-related data is shared with Statistics Canada, or with the CBSA. This mode of transportation is therefore exposed to unknown risks.

Due to a variety of factors, all four existing export reporting options have challenges which impede the ability of the CBSA to risk assess exports.

Exports to non-U.S. destinations must be reported to the CBSA via export declarations. Exhibit 4 provides a breakdown of declarations by type. Appendix C provides a description of all export reporting methods available to exporters.

The paper based B13A export reporting option is still in use. However, it has been declining steadily since 2008.

The Export Programs made an effortFootnote 84 to reduce B13A reporting following the 2008 Export Programs evaluation recommendation to eliminate paper based reporting.Footnote 85 Usage decreased from FY 2007-2008 to FY 2012-2013, measured by the number of lines on an export declaration, from 16% of share of total declarations to approximately 5%.

The last compliance verification review in 2008-2009Footnote 86 on paper-based export declarations found that information reported on B13As was often inaccurate, incomplete or was untrue, where approximately 45% of B13As examined were non-compliant.Footnote 87

Risk assessment at a national level is not possible with information from B13A forms as it is not entered into a CBSA automated database. Rather, the regions are responsible for reviewing hard copy B13A export declaration forms and making a determination to conduct an inspection of goods. This is a gap because B13As in the air mode of transportation comprise 27% of all export declarations in that mode of transportation.

The 2013-2014 National Border Risk AssessmentFootnote 88 identified commercial air cargo as “the most frequently abused stream for illegal export of controlled or sensitive goods and technologies, in contravention of Canada’s counter proliferation efforts.” Based on the last compliance verification review conducted in the air cargo mode of transportation in 2008-2009, a high number (72%) of goods declared using B13A forms were coded as commodities that could be strategic or dual use.Footnote 89

The two hour mandatory export reporting timeline in the air mode of transportation makes it especially difficult to review, risk assess, prioritize export declarations, locate and conduct compliance verification. Furthermore, exporters can submit B13A forms at any CBSA export office in the country.Footnote 90 The export office does not have to be located at the same port where the goods will be leaving, making risk assessment of these goods impossible. Also, in some cases exporters and brokers have been pre-stampingFootnote 91 blank B13A forms with a date and time, to be filled in at a later time, and submitted to the CBSA at the last minute to circumvent the already short CBSA mandatory export reporting timelines in the air mode of transportation.Footnote 92

The resultant rate is high for referrals related to the CBSA’s counter proliferation risk-assessment activities in the marine and air modes of transportation. Therefore, the Export Programs is successful at ensuring that counter proliferation activities are helping Canada meet its export obligations.

The national resultant rate for referrals related to counter proliferation is high at approximately 40% (Exhibit 5), where potentially dangerous goods were detained and/or seized.Footnote 93 Electronic export declarations are reviewed and risk assessed by the Counter Proliferation Operations Section (CPOS) at NHQ who send out referrals to the regions to exam shipments for the marine and air modes of transportation related to controlled, strategic and dual use goods.

Source: Counter Proliferation Operations Section. *Not all cases were generated in the same fiscal year.

The Winnipeg Rail Unit conducts targeting and compliance verification activities for exports in the rail mode of transportation and therefore supports the CBSA’s efforts to ensure Canada’s exports are compliant.

The International Trade in Arms Regulations (ITAR) unit is responsible for rail targeting of goods moving by rail to Canadian/U.S. marine ports.Footnote 94 Their targeting is focused on goods found on Canada’s Export Control List, related destination countries and stolen vehicles. The resultant rate for referrals related to the ITAR activities in the rail mode of transportation is high at approximately 12% in 2013.Footnote 95 Between 2011 and 2013, it recovered 490 stolen vehicles (one of the three national export priorities) and two strategic goods.Footnote 96 The ITAR unit has put a process in place to avoid the duplication of referrals with CPOS.

The Rail Export Verification Unit (REVU) conducts compliance verification using [*]. If non-compliance is suspected following the review, an AMP could be levied,Footnote 97 or BSOs in the regions are contacted to conduct compliance verification and detain goods. Exporters are contacted (by phone or letter) to alert them to the error and educate them and thus promote voluntary compliance. Between 2009 and 2013, the REVU unit assessed 121 AMPs for a total of $48,325.

Export declarations made using the Summary Reporting option increased from approximately 4% of all export declarations in FY 2007-2008 to approximately 7% in FY 2012-2013.

Summary Reporting, the second paper-based export declaration option, is available to exporters of bulk homogeneous goodsFootnote 98 who register with the CBSA.Footnote 99 This option allows exporters to report, after the goods have left Canada, directly to Statistics Canada. The information on the declaration is not registered in CBSA databases. Compliance verification is therefore only possible for the CBSA after goods have been exported.Footnote 100 The risks associated with this reporting option were identified in the 2008 Evaluation of the Export Programs which led to a recommendation to enhance the risk-assessment process to ensure that companies participating in Summary Reporting are subject to the same standard of security assessment as is undertaken for the Partner in Protection (PIP) program.Footnote 101 In response, all Summary Reporting participantsFootnote 102 were re-assessed for eligibility and are required to re-register with the CBSA every five years to ensure that reported goods meet the criteria. However, Summary Reporting cannot be considered as having the controls and a risk assessment process that compare to other facilitative programs such as PIP. In the same way, Summary Reporting participants are not considered trusted traders as are those participating in other programs such as the Customs Self-Assessment.

The automated export declarations, which comprised approximately 87% of all declarations in FY 2012-2013, provide the means to view export shipments electronically in advance of goods being exported, and risk assess exports fasterFootnote 103 compared to the B13A paper declaration option. [*]

CAED was originally built by Statistics Canada for the purpose of collecting accurate trade data. Information from CAED is stored in the CBSA’s Accelerated Commercial Release Operating Support System (ACROSS) which has a three month search history capability.Footnote 104 The Export Programs are looking at options to build a new system that would better support the CBSA export enforcement role. However, until a funding source is identified, the future of the system and timelines for its delivery remain uncertain.Footnote 105 Infrequently exporters use the G7 EDI electronic reporting systemFootnote 106 to report exports.

To what extent are clients aware of export requirements?

Information on Canada’s export requirements is not always accessible and clear to exporters. However, external stakeholder associations representing exporters and carriers noted that the CBSA consulted regularly and informed them of legislative and regulatory changes.Footnote 107

Lack of awareness can result in exporters not declaring goods, completing export declarations incorrectly or not obtaining the required permits when necessary. Websites operated by different government departments, including the CBSA, Footnote 108 contain information directed to exporters. D-Memoranda designed to inform exporters of requirements are not contained in one location on the CBSA website. The CBSA, in collaboration with DFATDFootnote 109, conducts ad-hoc outreach sessions to exporters and operates a telephone assistance Border Information Service (BIS) line. Common questions to the BIS line relate to documentation required to export goods and where and how exports need to be reported.

The most prevalent Administrative Monetary Penalty (AMP) contravention representing 70%Footnote 110 of the total issued from 2008-2009 to 2012-2013, related to providing inaccurate or incomplete information on export declarations.Footnote 111

To what extent do partnerships contribute to the achievement of CBSA’s export obligations?

Key partnerships with other government departments and external stakeholders in relation to exports support the CBSA’s export obligations but some gaps exist.

The CBSA’s authority to enforce the export legislation of other government departments and agenciesFootnote 112 is stipulated in the legislation of those departments and agencies and in some cases also supported by MOUs and D-Memoranda. In relation to counter proliferation, the Counter Proliferations Operations Section (CPOS) at the CBSA works closely with the Department of Foreign Affairs, Trade and Development (DFATD) to enforce the Export and Import Permits Act (EIPA).Footnote 113 When goods fall under the Export Control List (ECL) of the EIPA, the CBSA relies on DFATD for an expert opinion to make a determination on whether detained goods are in contravention of the ECL before the goods can be released or seized. In the past, a lack of clear guidelines on information needed when completing a detention form for DFATD had resulted in delays in receiving a determination. However, in March, 2013 DFATD identified information deemed mandatory to make a determinationFootnote 114 and implemented a new process for completing detention forms. This has improved the process according to interviewees, although there is no data to support improvements in determination rates and turnover times.

The CBSA Export Programs has a long-standing relationship with Statistics Canada whereby the CBSA has facilitated the collection of statistical data for Statistics Canada through the requirement to have export declarations. The relationship works well. However, the electronic CAED system, which Statistics Canada owns, does not have the necessary capabilities to risk assess and target exports and does not support the Export Programs enforcement role.

In 2001, in order to provide enforcement controls needed to retain Canada’s exemption under the International Traffic in Arms Regulation (ITAR), a partnership was formed with rail transportation companies that has resulted in an effective working relationship which grants the CBSA permission to use their proprietary systems to review waybills/shipment information.Footnote 115

4. Demonstration of Efficiency and Economy

Are the activities of the Export Programs delivered in a cost effective manner?

In the absence of information on the full number of FTEs or resources spent on the Export Programs, the evaluation was not able to establish the cost of the Export Programs nor assess the efficiency of program activities.

The Export Programs is currently developing a Resources Allocation Model (RAM).Footnote 116 Considering the significant discrepancy between the extent of the Export Programs’ obligations and the resources dedicated to them, the RAM is expected to identify gaps and inform resource decisions.

In 2013, the Export Programs developed a Performance Measurement Framework following a recommendation made in the 2008 Export Programs Evaluation. However, with the exception of counter proliferation data and two out of twenty seven performance measurement indicators currently collected in the marine mode of transportation, no performance data is rolled up at a national level for any of the other modes of transportation. As a result, it was not possible to assess the efficiency and cost-effectiveness of program activities.

The two performance measurement indicators collected in the marine mode of transportation are the number of examinations and number of resultant examinations. The counter proliferation data is collected by the CBSA’s Counter Proliferation Unit and includes number of referrals, examinations and resultant examinations in the air and marine modes of transportation. There are also no performance targets against which compliance activities can be assessed in relation to the three national priorities of the Export Programs. It is also therefore not possible for regions to know if they are making the right decisions in terms of where to allocate resources.

5. Conclusion

There is a continued need for the CBSA’s Export Programs as Canada’s exports have increasingly diversified to include markets other than the United States of America and trade plays a key role in Canada’s economy. The role of the Export Programs has changed over time from collecting trade data to include responsibilities for the safety and security of the global trade chain through counter proliferation efforts and enforcement of export control legislation. However, the CBSA Export Programs has not evolved sufficiently to meet the needs of this enforcement role. The systems are outdated and not in line with WCO guidelines which advocates advanced pre-departure electronic export reporting.

Since the evaluation of the Export Programs in 2008, the Program has undertaken a number of initiatives that have resulted in some success such as, the identification of national priorities, reduction in the use of B13As, re-registration of Summary Reporting participants, the design of a Performance Measurement Framework and collection of data on two indicators in the marine mode of transportation. However, some of the findings from the previous reportFootnote 117 were also identified as issues in this evaluation and they include the challenges related to paper based export declarations (B13A and Summary Reporting), the two hour export reporting timeframe in the air mode of transportation and collecting compliance and performance data. The lack of dedicated resources in the regions and export targeting, monitoring and performance measurement capabilities has limited the Export Programs’ ability to effectively manage the program and its obligations.

A detailed summary of the key findings, recommendations and management response and action plan that resulted from this evaluation can be found in the Executive Summary.

Appendix A – Acronyms and Abbreviations

ACROSS

Accelerated Commercial Release Operation Support System

AMP

Administrative Monetary Penalty

BSO

Border Services Officer

CAED

Canadian Automated Export Declaration

CBSA

Canada Border Services Agency

CPOS

Counter Proliferation Operations Section

DFATD

Department of Foreign Affairs, Trade and Development

GDP

Gross Domestic Product

GTA

Greater Toronto Region

ITAR

International Traffic in Arms Regulation

MOU

Memorandum of Understanding

NHQ

National Headquarters

UN

United Nations

RAM

Resource Allocation Model

REVU

Rail Export Verification Unit

WCO

World Customs Organization

Appendix B - Comparison of Findings and Recommendations between the 2008 CBSA Export Programs Evaluation Study and the 2014 Evaluation of the Export Programs

Previous Findings (2008)

Current Findings (2014)

Progress

Once exporters registered with the CBSA no compliance verification took place to check that goods being exported actually matched the goods that were reported. Exporters were considered low risk because they were registered with the CBSA. However, at the time of registration no stringent risk assessment process such as that used for Partners in Protection (PIP) were used to risk assess both the company and company directors. This led to the following recommendation:

Enhance the risk-assessment process to ensure that companies participating in Summary Reporting signatories are subject to the same standard of security assessment as is undertaken for PIP, CSA and FAST programs (Recommendation 2):
Consider developing options to enhance the security of existing facilitative programs by undertaking the following (Recommendation 2)

In October 2011, the Export Programs re-assessed all Summary Reporting participants to ensure that goods reported under this program were compliant with the Summary Reporting criteria (homogeneous & bulk goods) and would be required to do so every five years. However, unlike the PIP program, the re-registration process did not include risk assessing companies and their directors for compliance prior to approving them as Summary Reporters.

Currently only late Summary Reporting is monitored.

Minimal improvement

Almost no data existed on exporter compliance and the risk associated with this non-compliance. This resulted in the following recommendation:

In 2008-2009 a compliance verification check was conducted in the air mode of transportation to identify the degree of non-compliance in the air mode of transport. Also, a probe took place in collaboration with the RCMP and the Insurance Bureau of Canada to assess the problem of stolen vehicles being exported from the marine ports of Halifax and Montreal. A similar probe took place in 2012 to assess the same problem in the Pacific region.

Apart from the data derived from the above compliance verification checks, the only other performance data available that is nationally rolled up include the following:

Two performance indicators in the marine mode;

Compliance to reporting data in the rail mode;

Targeting data from CPOS;

Targeting data from ITAR;

National AMPs data.

Compliance data, rolled up at a national level, is not available in the air and highway modes of transport.

Moderate improvement

Paper based export reporting is not congenial to risk assessment and cannot be targeted at a national level. This led to the following recommendation:

Although the use of paper based export declarations have decreased as a result of initiatives by the Export Programs in 2008 and again in 2012, they continue to be used in all modes of transport but are most commonly used in the air mode of transport. This continues to pose a risk as paper based export declarations cannot be risk assessed at a national level and in the case of Summary Reporting, cannot be risk assessed at all.

Minimal improvement

To bring export reporting in line with international standards and to facilitate targeting, risk assessment, performance measurement and monitoring electronic reporting was recommended:

Continue to design and develop a single electronic reporting system and ensure that the new system can accommodate compliance verification and targeting and that it has report and historical function to support performance measurement and trend analysis (Recommendation 3).

Although electronic reporting has increased following initiatives by the Export Programs to reduce paper based export declarations, electronic reporting is still not mandatory and the regulatory changes needed to make this mandatory have not taken place and are not expected to be completed until late 2015 at the earliest.

The Export Programs continue to use the now aging Canadian Automated Export Declaration system and no firm plans are in place to replace the system which addresses the needs of the Agency.

No improvement

The two hour reporting timeframe in the air mode does not allow for enough time for risk assessment and compliance verification. This led to the following recommendation:

Expand the reporting time frame for air shipments (Recommendation 3).

All the problems that were identified in the previous evaluation are still present. The previous recommendation was closed with no changes made.

No improvement

Appendix C – The Export Process

The CBSA uses export declarations to ensure compliance with Canadian export control legislation. Exporters can report exports to the CBSA in one of four ways:

Export Declaration Options (how to declare)

Paper Based Export Declarations Options

B13As: Paper based form that has to be stamped with a date and time stamp prior to being submitted to the CBSA;

Summary Reporting: this option is available to exporters who register with the CBSA and export bulk and homogeneous goods. They are allowed to submit export declarations directly to Statistics Canada after the goods have already left Canada.

Electronic Export Declaration Options

CAED: Most commonly used for both export reporting and risk assessment.

G7 EDI: this option is only available to exporters who are registered with the CBSA.

Export Declaration Mandatory Reporting Timeframe (when to declare)

Exporters must submit export declarations to the CBSA within the mandatory export reporting timeframe listed below based on the mode of transportation:

Marine: not less than 48 hours before cargo is loaded on the vessel;

Air: not less than 2 hours before cargo is loaded on the aircraft;

Rail: not less than 2 hours before the railcar containing the goods is assembled to form part of the train;

Highway: immediately prior to exit.

Export Declaration Requirements (what needs to be declared)

The process is different depending on the country of destination and whether the goods are controlled or regulated. Declared goods must be available for examination at the time of reporting.

Goods Exported to the United States

Goods exported to the U.S. Footnote 118 do not require an export declaration with a few exceptions,Footnote 119 as there is a Memorandum of UnderstandingFootnote 120 between the U.S. and Canada on the exchange of import data.

Goods Exported to other Countries

The CBSA requires exporters of goods that are valued over CAN$ 2,000, destined to countries other than the U.S., to submit an export declaration report providing details of goods to be exported.Footnote 121

Controlled, Regulated or Prohibited Goods

All goods regardless of export destination that are classified as controlled, regulated, or prohibited by any act of Parliament or international agreement, must be accompanied by relevant permits, licenses, or certificates as required by other government departments, regardless of the value of the goods.

Compliance Verification Process

Risk Assessment

Intelligence information is collected on reported goods for exports believed to be in contravention of Canada’s export legislation and regulations as it relates to counter proliferation, and other controlled non-strategic goods and is shared with BSOs. The CBSA also receives intelligence from other government departments and law enforcement agencies. Targeting is conducted by the National Rail Export Targeting Unit in Winnipeg for rail exports to the U.S and the Counter Proliferation Operations Section at National Headquarters for strategic controlled and dual use goods in all modes of transportation except in the highway mode of transportation. Once goods have been targeted, regional export program teams where available, or BSOs at POEs are notified in the form of a ‘lookout’ referral and targeted goods are detained for examination. If resultant, BSOs will either levy an Administrative Monetary Penalty (AMP)Footnote 122 on the exporter and/or carrier or refer the case to the CBSA Criminal Investigation Division, which processes cases related to non-compliance with the Customs Act and forwards cases related to non-compliance with the Criminal Code to the Royal Canadian Mounted Police.

Compliance

At POEs, BSOs are responsible for reviewing export documents (including any required declaration and permit, license or certificate) as necessary. In addition to following up on referrals, they assess the level of risk based on the information contained in the export declaration and determine if an exam is necessary. Goods found to be non-compliant are detained for follow-up, seized or subject to ascertain forfeiture. Exporters and/or carriersFootnote 123 can be subject to monetary penalties.

Appendix D – Program Logic Model

1. Program mandate: To provide integrated export policies and program activities that support trade statistic collection, national security and public safety priorities, and facilitate the free flow of exported goods that meet all legislated requirements.

5. Ultimate outcome: Goods exported from Canada are accurately reported and meet all requirements under the program legislation (leads to strategic outcome 6).

6. Strategic outcome: International trade and travel is facilitated across Canada’s border and Canada’s population is protected from border-related risks.

Appendix E – Program Organizational Structure

The Export Programs Unit is part of the Commercial Border Programs Division in the Border Programs Directorate. It is responsible for developing and maintaining policies, procedures and D-Memos and proposing changes to regulations that affect the Export Programs.

CBSA Programs Branch

Border Programs Directorate

Commercial Border Programs Division

Export Programs Unit

The Commercial and Trade Operations Division which in the Border Operations Directorate provides operational support to the Export Programs Unit and other units related to the delivery of the Export Programs. The Criminal Investigations Division in the Enforcement and Intelligence Operations Directorate investigates and pursues prosecution of those who commit criminal offences against Canada’s border legislation, including export related fraudulent activities. The Counter Proliferation Operations Section in the same directorate administers and enforces CBSA Counter Proliferation programs including developing and coordinating related intelligence and risk assessing export declarations while the Contraband Intelligence Section provides analysis, client service, monitors criminal markets (drugs, including precursor chemical diversion; currency seizures as suspected proceeds of crime; tobacco; and firearms), and coordinates related intelligence, including export related cases.

CBSA Operations Branch

Border Operations Directorate

Commercial & Trade Operations Division

Commercial Operations Unit

CBSA Operations Branch

Enforcement & Intelligence Operations Directorate

Criminal Investigations Division

Counter Proliferation Operations Section

Enforcement & Intelligence Operations Directorate

Intelligence Operations Analysis Division

Contraband Intelligence Section

The export programs are delivered in all seven regions. Some regions have dedicated export teams while others do not.

Appendix F – Evaluation Methodology

Evaluation methods were selected to collect information through the use of primary and secondary sources. A multi-method research approach was used to generate multiple lines of evidence which resulted in both quantitative and qualitative data. Qualitative methods were used to provide additional lines of evidence to support quantitative methods and vice versa. Data and findings were recorded in an evidence matrix, and only data could be triangulated with multiple lines of evidence were used in the final evaluation report. The research methodologies used in the evaluation of the Export Programs are described below:

Calibration

The evaluation leveraged on the 2008 Export Programs evaluation both to utilize evaluation resources effectively and to avoid duplication. Issues and recommendations made in the 2008 Export Programs evaluation were examined to assess if management adequately responded to those recommendations. Also, where significant recommendations were made, the evaluation team examined whether identified issues persist and recommended actions where possible to address any residual issues.

Benefits derived from adopting this approach included: data trend analysis (2008-2013); tracking the Export Programs progress over a five year period (2008 – 2013) and assessing the impact on program performance following the implementation of the 2008 Export Programs evaluation recommendations.

Review of Documents

Document reviews were conducted. This provided background and contextual information about the program. The information fed into the subsequent development of evaluation data collection tools, such as interview guides, and to identify key stakeholders to be interviewed.

The evaluation team reviewed internal program and CBSA documents, as well as Government of Canada documents. These included program policy, priority, strategic and risk reports, Annual Reports, Reports on Plans and Priorities, Departmental Performance Reports, Speeches from the Throne and federal Budgets. Other pertinent documents from externally or publicly available sources were also used. Data and information used in previous evaluations, such as the 2008 Export Programs evaluation, was updated to gather comparable information and conduct trend analysis over a five year period (2008-2013).

Documents were analysed, synthesized and triangulated (cross-referenced) with data gathered from other sources.

Review of Operational, Performance and Financial Data

Operational, performance and financial data was collected, to the extent it was available, to assist in the assessment of program effectiveness and efficiency. It was analysed at both a national and regional level. This data was cross-referenced with evidence from other methodologies.

A pre-evaluation data check of operational and performance data was conducted as part of the development of the evaluation plan to assess the availability of data prior to commencing the evaluation field work. The review also included secondary data sources such as data available from Statistics Canada, external association reports, and the 2008 Export Programs evaluation. This allowed for the identification of data limitations which had to be mitigated by factoring them into the methodological design, (e.g. through the collection of primary data or by using proxy measures). These limitations, and possible mitigation strategies, can be found on page 3.

Key Stakeholder Interviews

The purpose of key stakeholder interviews was to gather in-depth information on the Export Programs from those who are involved with the programs. Key stakeholders include:

CBSA Director Generals and Directors in the Programs and Operations Branches at NHQ;

CBSA regional management involved in Export Programs;

Representatives from other federal government departments;

Representatives from private sector stakeholder associations.

Interviewees’ views, experience and knowledge of program design, delivery, performance and impact contributed to addressing evaluation questions related to relevance and performance. Findings derived from interviews were used to provide contextual information (as one line of evidence) and to corroborate or refute information collected through other sources.

Site Visits

Sites visits to airports and marine ports in three regions were conducted between the periods of December 2013 and January 2014. These provide the opportunity to tour and observe operations in different modes by walking through the facilities to get an understanding of how the program is delivered, conducting interviews with program management, Chiefs and Superintendents, as well as group interviews with staff who implement the Export Programs. This allowed for the identification of regional challenges and best practices.

Site Selection

The Greater Toronto Area (Toronto) - Pearson International Airport: This site was selected because it has high export volumes in the air mode of transportation. Also, it formed one of the 2008 Export Programs evaluation chosen sites, which allowed for the collection of data that was comparable against the 2008 Export Programs evaluation findings.

Pacific (Vancouver) – Vancouver International Airport and Marine Port: This site allowed for observations and learning about Export Programs operations in two modes of transportation. The site was also selected for the 2008 Export Programs evaluation, which made the comparison of data from that evaluation possible.

Quebec (Montreal) – Pierre-Elliott-Trudeau International Airport and Marine Port:This allowed for observations and learning about operations of the Export Programs in two modes of transportation. The site was also selected for the 2008 Export Programs evaluation. The marine port at this site has also interdicted higher instances of stolen vehicles being exported. During the previous evaluation, a pilot was conducted in conjunction with the Insurance Board of Canada to explore this issue. This evaluation will also allow for a follow-up assessment to determine the impact of the pilot and the ensuing changes to the Criminal Code related to the CBSA’s authority vis-à-vis the commodities obtained by crime. Footnote 124

Where site visits were not planned (Prairie, Atlantic, Northern and Southern Ontario regions) individual interviews were conducted by telephone to ensure that the evaluation includes the perspectives of those working in all regions, as well as in all modes of transportation.

Findings derived from site visits were used to support information gathered from other sources such as document and data reviews and analyses.

The Counter Proliferation Operations Section (CPOS), which administers and enforces CBSA Counter Proliferation programs including developing and coordinating related intelligence and risk assessing export declarations, is part of the Criminal Investigations Division in the Operations Branch.

International accords such as International Traffic in Arms Regulation (ITAR), Wassenar Arrangement, Non Proliferation Treaty (NPT) oppose the destabilizing accumulation of weapons (including weapons of mass destruction), military goods and technology, or goods and/or technologies that could be used for developing or producing nuclear, chemical or biological weapons or their missile delivery systems. Source: CBSA Agency Business Model. Available on: http://abm_moa/Program/9e58c6ea-569a-40d4-b36e-59bb47d9c05a.html

Proliferation refers to goods, technology or knowledge that could be used to design or development weapons of mass destruction (WMDs) and can include dual–use items such as electronic equipment not always listed in the EIPA control list. Counter proliferation refers to the identification and control of the exportation of such goods.

Proliferation refers to goods, technology or knowledge that could be used to design or development weapons of mass destruction (WMDs) and can include dual–use goods such as electronic equipment not always listed in the EIPA control list. Counter proliferation is the identification and control of the exportation of such goods.

Others are International Traffic in Arms Regulations, UN Resolution on Proliferation Financing, and Revised Kyoto Convention. As a member of the World Customs Organization (WCO), the CBSA also has a commitment to ensure that Canada’s exports are consistent with international standards and procedures.

The 2010-2011 CBSA Report on Plans and Priorities (RPP) identified the proliferation of dual-use goods as one of six areas of principle concern for the Agency in the next five to ten years. It is listed as one of the 17 Enforcement and Intelligence Priorities (2011-2012 to 2013-2014). In the 2013-2014 CBSA RPP, strategic exports are categorized as a medium risk in the CBSA Enterprise Risk Profile (ERP).

Source: Statistics Canada. Number of lines by declaration type. Each line represents a different commodity in an export declaration (one declaration is equivalent to one shipment). Therefore, the number of lines will be the same or higher than the number of export declarations.

External stakeholder associations include the Canadian Association of Importers and Exporters Inc. (I.E. Canada), Canadian International Freight Forwarders Association (CIFFA), Canadian Society of Customs Brokers (CSCB), International Air Transportation Association, and Shipping Federation of Canada. Source: BCCC Export Sub-Committee

The CBSA enforces export legislation on behalf of OGDs and relies on OGDs’ resources and expertise for export control in fields such as nuclear, chemical and biological where OGDs’ capabilities exceed Agency’s capabilities. Once the CBSA detains goods on behalf of OGDs, it has to rely on these government departments to make a determination on whether the detained goods are in contravention of their legislation before the goods can be released or seized by the CBSA. The CBSA deals with a number of other government departments and Agencies to control the export of both controlled strategic and non-strategic goods. These include Canadian Heritage, Health Canada and Transport Canada. A full list is available on: http://www.cbsa-asfc.gc.ca/export/exp-reflist-listeref-eng.pdf. (Accessed on April 23, 2014)

These include technology that could be used to design or develop weapons of mass destruction (WMDs) and include dual–use items listed in the Export Control List under the Export and Import Permits Act.

Goods exported to the U.S do not require an export declaration. Export declarations are not required because Canada and the U.S. have a Memorandum of Understanding on the exchange of import data. Source: D20-1-1

In the 1980s the Export Programs primary role was to collect statistical data for Statistics Canada but this role evolved in the 1990s to include counter proliferation enforcement responsibilities and to assist OGDs in enforcing their export legislation in line with their mandate. More recently, in 2011 this role also included the control of the export of stolen vehicles. However, neither resources nor export reporting systems have evolved to meet the demands of this new CBSA enforcement role.

Source: Counter Proliferation Operations Section (CPOS). The 2014 CPOS paper on ‘The CBSA and Counter Proliferation Operations’ indicates that ‘the Government of Canada Counter Proliferation community desperately needs a cogent and unified strategic environment, including a viable strategy and a government-wide policy process, to provide the framework for operations and intelligence’.

Two unsuccessful attempts (2008 & 2011) were made to pass a Memorandum to Cabinet to implement a National Counter Proliferation Strategy. Attempts were made on both occasions to also secure funding for a new export electronic system.

In order to collect export data, the CBSA and StatsCan entered into a joint agreement, in 1998, to build, manage and pay for the CAED system. The system was a means to improve the efficiency and accuracy of trade statistics collected on behalf of StatsCan.

Each line represents a different commodity in an export declaration (one declaration is equivalent to one shipment). Therefore, the number of lines will be the same or higher than the number of export declarations.

Memorandum to Regional Directors general on Export Program Priorities, October 29, 2012. Although the Memorandum does not include monitoring the exports of drugs as a priority, it does stress that it does not exclude the requirements to act upon other priorities such as the detection of narcotics.

Dual-use items are goods that have both civilian and military applications. Source: Wassenaar Arrangement Website. http://www.wassenaar.org/controllists/2005/Criteria_as_updated_at_the_December_2005_PLM.pdf (Accessed April 24, 2014)

Source: 2010-2011 the CBSA Report on Plans and Priorities. ‘Based on analysis undertaken within the Government of Canada, as well as international border management organizations, threats expected to be the principal areas of concern for border integrity for the next five to 10 years are: terrorism (both terrorists and terrorism-related material); firearms, drugs, child pornography and other contraband; food and product safety; the health of persons entering Canada (e.g. freedom from pandemic disease); the proliferation of dual-use goods (equipment, technology or any type of good that may be used in connection with programs of weapons of mass destruction); and illegal migrants (e.g. criminals, including war criminals, and economically-driven migrants)’.

This priority was established in 2010 when Parliament passed Bill S-9 to amend the Criminal Code in an effort to combat the exportation of property obtained by crime. This bill gave the CBSA authority to examine and detain shipments suspected of exporting stolen vehicles.

The CBSA’s mandate outlined in the Canada Border Services Agency Act, section 5(1) states that ‘the Agency is responsible for providing integrated border services that support national security and public safety priorities and facilitate the free flow of persons and goods, including
animals and plants that meet all requirements under the program legislation’.

Environment Canada issues permits, certificates and licenses under the Canadian Environmental Protection Act and under The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) for non-strategic controlled goods such as electronic waste and animal parts.

World Customs Organization developed a classification system for imports and exports, the Harmonized System (HS) system, which is analysed to determine international trade in goods, and international trade flow.

The Export Programs established a “Tiger Team”, in February 2014, after the evaluation field work stage ended, dedicated to collecting program performance information to develop of a Resources Allocation Model (RAM).

The vast majority of examinations are non-intrusive. Pier examinations are dockside examination that are partially intrusive and involve the officer opening the container doors to perform a visual inspection and a limited physical examination of the cargo closest to the door.

Vehicle and Cargo Inspection System trucks carry X-ray technology and provided the Agency with a quick and non-intrusive method to detect anomalies in shipments. Source: CBSA in Brief, Science and Engineering. Available on: http://atlas/istb-dgist/services/se-si/inbrief-enbref/vol3/edition1/vol3_1_eng.asp (Accessed on April 23, 2014).

The Hiemann Cargo Vision-Mobile system is an upgrade to VACIS. It generates high energy x-rays that can see through virtually any material. Source: CBSA in Brief, Science and Engineering. Available on: http://atlas/istb-dgist/services/se-si/inbrief-enbref/vol3/edition1/vol3_1_eng.asp (Accessed on April 23, 2014).

The data provided by Statistics Canada also include Low Value Shipments’ share of total lines and total value (not included in this table). As a result, the total percentage in this table does not add up to 100%.

The Export Programs released a Customs Notice in 2008 to encourage exporters to convert to electronic export declaration reporting and again in April 2012 selected one day, calling it a voluntary day, in which it encouraged exporters to change over to electronic reporting. Source: Export Programs Unit.

Source: D20-1-1, section 149 states: ‘exporters who report their exports using form B13A, export declaration, will submit the export documentation to an export reporting office where exports may be reported. A list of designated export offices can be found on: www.cbsa.gc.ca.’ Only controlled goods must be reported at the place of exit in accordance with section 150 that states: controlled goods must be reported at the place of exit, or at the place stated on the permit, within legislated time frame(s). Source: http://www.cbsa-asfc.gc.ca/publications/dm-md/d20/d20-1-1-eng.html

Exporters use a B13A stamping machine, usually stationed outside the customs office counter to self-stamp B13A forms with a data and time prior to submitting a copy to the CBSA. This is supposed to be done once the B13A form is filled in but exporters in GTA were stamping blank forms.

In 2010, the GTA region conducted a blitz to assess the problem of exporters and brokers stamping blank B13A forms. The blitz resulted in all six B13A stamping machines being moved behind the counter in the following GTA locations: Commercial Operations, VISTA, Interport, Oshawa, Barrie and Front Street. Source: GTA Export Programs Team.

CPOS referrals are sent to the regions in the form of ‘lookouts’ but the lack of regional resources, limited office hours and lack of intelligence support, resulted in 13.44% of referrals made by CPOS being missed in FY 2012-2013.

The lack of regional resources, limited office hours and lack of intelligence support, resulted in approximately 9% of ITAR targets being missed or no response being received from the regions on referrals in 2013.

Source: REVU Operational Report, September 2008. An AMP penalty for failing to provide correct export report information would be issued if the following two conditions were met: 1. An exporter refused to respond to REVU client education efforts. 2. The rail car containing the export shipment in question had physically left Canada.

No risk assessment is conducted by the CBSA on Summary Reports. Only late reporting to Statistics Canada is monitored and AMPs are issued by the CBSA when exporters fail to send the mandatory Summary Report to Statistics Canada on time.

Recommendation 2a states: Enhance the risk-assessment process to ensure that companies participating in Summary Reporting and MOU signatories are subject to the same standard of security assessment as is undertaken for the PIP, CSA and FAST. Source: 2008 Export Programs Evaluation.

The CBSA maintains a website for exporters ‘Exporting Goods from Canada: A Handy Guide for Exporters’ to inform exporters of legislative requirements. Available on: http://www.cbsa-asfc.gc.ca/publications/pub/bsf5081-eng.html (Accessed on April 23, 2014)

DFATD also has an important role to play in informing the public on export obligation. DFATD operates its own website for exporters and publishes outreach material, ‘A Guide to Canada’s Export Controls’, 2011. Available on: http://www.international.gc.ca/controls-controles/about-a_propos/expor/guide.aspx (Accessed on April 23, 2014). Other departments like Canadian Nuclear Safety Commission also operate a website as do other OGDs.

613 (8%) of the total number of AMPs issued over the period (7,694) were for the C348 contravention: Person intentionally provided false information in any permit, certificate, licence, document or declaration required to be provided for exported goods. Source: CMRS

The CBSA deals with a number of other government departments and Agencies to control the export of both controlled strategic and non-strategic goods. These include: Canadian Heritage, Foreign Affairs, Trade and Development Canada, Health Canada and Transport Canada. A full list is available on: http://www.cbsa-asfc.gc.ca/export/exp-reflist-listeref-eng.pdf. (Accessed on April 23, 2014)

This is a methodology by which resources are allocated to an activity based on indicators and drivers impacting costs (both direct and indirect costs), expected workloads (volumes), performance targets and service standards. Source: CBSA Export Programs.

Export declarations contain details such as exporter name, address, consignee name and address, country of final destination, name of carrier, freight forwarder or consolidator, mode of transport, vessel name date and place of exit, item description and Harmonized System code, quantity, weight, unit of measure, value at place of exit, freight charge.

AMPs are a civil penalty regime designed to encourage compliance with customs legislation. The penalties are intended to be corrective rather than punitive. When an exporter infraction is detected, the AMP is applied against the business number (BN) appearing on the export declaration. Source: D20-1-1.

In 2011, Bill S-9 was enacted by the Government of Canada, making the export of stolen property a specific offence under the Criminal Code. By criminalizing the export of stolen property, it increased the CBSA’s authority and responsibility to control the exports of stolen vehicles.